Wal-Mart's Silence Distorts Retail Results

When retailers reported their May same-store sales on Thursday, the numbers fell short of analysts' expectations. Investors, fearful these dismal results signaled a prolonged weakness in consumer spending, poured bucketfuls of red all over the sector, and sending the S&P Retail Index down by as much as 3% during the day.

But lost amid the cacophony was one simple fact: These results may be as skewed as a fun-house mirror, as a result of the absence of Wal-Mart Stores(WMT Quote).

The behemoth, which accounts for a little more than 11% of sales in the U.S. retail market, announced last month that it would no longer report monthly sales -- and it's arguable that the entire sector's results were dragged down as a result.

The numbers released today by the International Council of Shopping Centers showed that in May U.S. chain-store sales sank by 4.6%.

Over the past six months, though, Wal-Mart has consistently outperformed the ICSC Index. On average, Wal-Mart saw a 3.2% monthly increase in sales between November 2008 and April 2009, while U.S. chain stores as a whole fell .6% during the same period -- numbers capable, in light of the Wal-Mart's market share, of padding the entire sector.

Wal-Mart, of course, is hardly alone in ending its monthly same-store sales reports. Sears(SHLD Quote), Home Depot(HD Quote), Lowe's(LOW Quote), and Chico's FAS(CHS Quote) have all ended reporting the figures

Currently, in fact, comparable sales reports only represent about 10% of total U.S. retail sales, according to Customer Growth Partners. "The monthly reports Wall Street so breathlessly awaits really primarily portray only two retail sectors, apparel chains and department stores, each of which represent well under 3% of U.S. personal consumption expenditures," Craig Johnson, president of CGP said in a statement.

All of which essentially makes retail sales like the Queen of England -- a curiosity worth gawking at, but far less powerful than the reputation that proceeds it.